Why an all-time high 2. Second, the chronic
Why Salespeople Thomas N. Ingram Charles H. Schwepker, Don Huts06 Factors considered to be most signtficant in contributing to salesperson failure were identtjied by examining the survey responses of 126 sales executives. The six most important factors were (1) poor listening skills; (2) failure to concentrate on top priorities; (3) a lack of sufticient effort; (4) inability to determine customer needs; (5) lack of planning for sales presentations; and (6) inadequate productlservice knowledge.The results suggest that those factors most significant in contributing to salesperson failure may be addressed through training and motivational techniques.
Furthermore, deficiencies in these areas may negatively affect relationship selling efforts, thereby severely affecting overall salesforce performance in an increasingly competitive marketplace. Fail Jr. INTRODUCTION In today’s competitive marketplace, personal selling is the key to success for many industrial firms.
As industrial customers become more demanding and attempt to streamline their own operations, it is not uncommon to observe sales organizations being put under intense pressure to meet elevated customer expectations. For example, Xerox recently cut its list of approved vendors from 5,000 to only 450 I. Undoubtedly, the sales orAddress correspondence to Thomas N. Ingram, Department of Marketing, Fogelman College of Business and Economics, Memphis State University, Memphis, TN 38152. anizations of the surviving vendors must be able to address Xerox’s expectations with highly competent salesforces. As personal selling becomes more crucial in determining overall success for many organizations, it is important to recognize some of the stark realities which challenge the sales executives charged with developing and sustaining competitive salesforces.
First, the costs of recruiting, developing, and deploying a professional sales force are at an all-time high 2. Second, the chronic problem of salesforce turnover continues to plague many sales organizations.According to one major survey, the average turnover rate in U. S. and Canadian firms is 27% 3. Furthermore, 20% of the respondents in this survey feel the turnover situation is worsening, and few see any sign for short-term reduction of turnover rates. Finally, sales managers are expected to face a shortage of qualified applicants from which to draw tomorrow’s recruits.
This is due in part to demographic changes and an identifiable lack of skilled workers who could be trained to succeed in complex sales jobs 4.As the realities of developing and sustaining a competent sales organization are fully realized, it is clear that the costs of salesforce failure are on the rise. The direct costs of recruiting, training, and, all too often, replacing salespeople provide incentives to gain a better understanding of factors related to salesforce failure. These costs, coupled with losses of revenue associated with sales territory vacancies, can lead sales managers to the Industrial Marketing Management 21, 225-230 (1992) 0 Elsevier Science Publishing Co. , Inc.
, 1992 655 Avenue of the Americas, New York, NY 10010 25 0019-8501/92/$5. 00 logical conclusion that it is far better to improve salesperson performance than to dismiss poor performers 5. Purpose The purpose of this study is to examine sales executives’ perceptions of salesperson failure in an attempt to better understand why it occurs. Understanding gained in this area may help to prevent salesperson failure, and thus improve overall salesforce performance.
First, the relevant literature will be reviewed. This will be followed by discussions of the research methods, results, and management implications. RELEVANT LITERATUREA review of the literature uncovered only one empirical article on the topic of salesperson failure.
Johnston, Hair, and Boles 6 examined the views of sales managers, salespeople, and students asked to identify factors associated with salesperson failure. These factors were then associated with recommended recruiting and selection practices. Sales managers identified several reasons why salespeople fail, including (I) lack of initiative; (2) poor planning and organization; (3) lack of enthusiasm; (4) lack of customer orientation; and (5) lack of personal goals.In conclusion, they stress the importance of hiring “trainable” candidates, as well as those with strong personal goals and a realistic view of the sales job. Moreover, they suggest that experienced salespeople should be incorporated into the selection process, and good candidates should not be eliminated because of a lack of sales understanding. Johnston, Hair, and Boles also queried salespeople and students on their views of what contributes to salesperson failure.
Not surprisingly, they found that students “have numerous misperceptions about which factors contribute significantly to failure in a sales career” (6, p. 4). Salespeople, being directly involved in the selling function, may have difficulty objectively assessing factors contributing to their failure because of the tendency to place the blame elsewhere, rather than on oneself, for deficiencies. This is partially supported by an attributional bias, known as the self-serving 7 or ego defensive bias 8, in which one tends to accept more causal responsibility for positive than for negative outcomes. Johnston, Hair, and Boles provide valuable insight into the selection process by which organizations recruit and hire new salespeople 6.
However, they did not consider factors contributing to failure of salespeople who have been on the job for some time. In contrast to the paucity of research on salesperson failure, there have been numerous attempts to identify those characteristics considered important for good sales performance. In an extensive review of the sales performance literature, Churchill et al. 9 indicate that the determinants of sales performance can be ordered in the following way in terms of their importance in explaining the variance in sales performance: (1) role variables, e.
. , role conflict and role ambiguity; (2) salesperson skill levels; (3) motivation; (4) personal factors, e. g. , personality characteristics; (5) job-related aptitude; and (6) organizational and environmental factors such as the method of compensation and the degree of competitiveness. However, these variables have had limited success in predicting sales performance.
The average correlation coefficient between predictors and performance in 1,653 cases was only 0. 19, thus explaining less than four percent of the variation in salesperson performance.Although the typical study looks at the impact of multiple predictors of salesperson performance, study results have been inconsistent and much remains unknown about the variables that may systematically affect salesperson performance 9. Given the limited research in the area of salesperson failure coupled with the difficulty in identifying factors substantially accounting for success, an empirical exploratory investigation was undertaken to examine what sales executives believe to be the most significant factors contributing to salesperson failure.THOMAS N.
INGRAM is Professor of Marketing and CHARLES H. SCHWEPKER, JR. , is a doctoral candidate in marketing at the Fogelman College of Business and Economics, Memphis State University, Memphis, Tennessee. DON HUTSON is co-author of the management training book insights into Excellence and author of the upcoming book High Performance Selling. RESEARCH Sample DESIGN AND METHODS A national mailing list of 4 10 sales executives was developed from a master list provided by Sales and Marketing Executives International, Cleveland, Ohio.
Respondents received a cover letter on university letterhead 226 requesting their cooperation in completing an enclosed questionnaire. A total of 126 completed responses were returned for a response rate of 30. 7%. Of those responding, approximately 34% said their company marketed primarily products, 32% services, and 34% both products and services. Firms surveyed employed anywhere from 1 to 7,000 salespeople.
More than half (56. 9%) of the companies responding compensate their salespeople by a combination of salary and commission, slightly over_ erson success, they were asked to indicate what they believed to be the single most important factor for ensuring a salesperson’s success in today’s marketplace. RESULTS Table 1 lists sales executives’ mean rankings for the six most and six least significant factors believed to contribute to salesperson failure.
Overall, even the least sig- Executives rank the most and least significant factors. one fourth (28. 4%) by commission only, and the remaining (14. 7%) by salary only.
Average annual sales per salesperson is $772,223, and average annual pay per salesperson is $41,172. nificant of all 29 factors listed received a mean rating just slightly over the theoretical neutral midpoint of 3, indicating that sales executives consider deficiencies in any of the areas to contribute somewhat to salesperson failure. In addition, the mean values of the top six failure factors were extremely close, suggesting from a practical point of view that they are equally important to the survey respondents.
Additional analysis was conducted to determine whether responses differed based on the following fac- Measures A comprehensive battery of failure factors was compiled from a review of the sales literature and discussions with various sales managers. These were used to construct a 29-item questionnaire capturing several antecedents of job performance (aptitude, skills, role perceptions, motivation, and personal, organizational, and environmental variables) as proposed by Walker, Churchill, and Ford lo.Moreover, these factors are comparable to those employed by Johnston, Hair, and Boles 6, who drew from Moss 1 I and Anderson and Hair 121. Respondents were asked to rate on a five-point scale (1 = very significant, 5 = not significant) the significance of each factor in determining salesperson failure in their respective industry.
Failure was defined as the inability of the salesperson to consistently meet minimum job standards.Furthermore, a set of open-ended questions asked sales executives to indicate which of three factor categories they felt was most significant in causing salespeople to fail: (1) factors that are beyond the control of the salesperson and the employer; (2) factors beyond the control of the salesperson but not beyond the employer; and (3) factors which can be controlled by the salesperson. Finally, to assess how respondents viewed sales- TABLE 1 Most and Least Significant Salesperson Failure Factor Factors Contributing to Mean RankMost Significant Poor listening skills Failure to concentrate on top priorities A lack of sufficient effort Inability to determine customer needs Lack of planning for sales presentation Inadequate product/service knowledge Least Significant Marital problems Poor administrative skills Substance abuse (drugs and/or alcohol) Emotional immaturity Pre-call negative assessment of prospects Deficient job-related aptitude * 1 = very significant, 5 = not very significant. I . X0* 1. 83 1. 84 1.
84 1. 86 1. 87 3. 41 3. 19 2. 95 2.
74 2. 65 2. 64 I 3 4 5 6 29 28 27 26 25 24 227 tom: (1) number of salespeople; (2) male-to-female ratio; (3) product or service sold; (4) method of compensation (salary, commission, or combination); (5) average annual sales per salesperson; and (6) average annual pay.
This follows the suggestion of Churchill et al. 9, who point out that situational differences may explain some of the variance in sales performance. T-test results (Table 2) reveal significant differences on three of the factors based on the ratio of men to women comprising the salesforce.
Companies with more than half of the sales force comprised of women identified not concentrating on top priorities, inability to determine cus- ample, the state of the economy) were least significant. Factors that are beyond the control of the salesperson but not the employer were ranked in the middle (mean, 1. 93). Finally, when asked to indicate the single most important factor for insuring a salesperson’s success in today’s marketplace, the respondents’ number one answer was a good/positive attitude (Table 3). This was followed by proper training and good work habits or hard work.Interestingly, neither good listening skills nor concentrating on top priorities was ranked as one of the 10 single most important factors for ensuring success, while planning came in tied for ninth. However, deficiencies in A positive attitude is important.
tomer needs, and poor listening skills as more important in predicting salesperson failure. In addition, based on a median split, companies with average annual sales per salesperson of $500,000 or less believe a lack of sufficient effort is more significant in contributing to failure than did those with higher average annual sales per salesperson.No significant differences were found for number of salespeople, type of product sold, method of compensation, or salesperson’s salary. When respondents were asked to rank from 1 (most significant) to 3 (least significant) those factors they felt were most significant in causing salespeople to fail, 90. 9% (mean, 1.
10) of the sales executives felt that factors which can be controlled primarily by the salesperson are most significant in causing salespeople to fail. Conversely, 89. 7% (mean, 2. 8) felt factors that are beyond the control of the salesperson and the employer (for exthese areas were considered to be significant in contributing to salesperson failure. DISCUSSION Closer examination of the failure factors yields some interesting findings.
Those factors considered to be most significant in contributing to failure can all be influenced by sales management through training and motivation; the salesperson can be taught to become a better listener, how to set and concentrate on top priorities, determine customer needs, and plan and execute an effective sales presentation.Likewise, training can enhance salespeople’s knowledge of the product or service, rather than sending them into the field unprepared. A salesperson’s lack of effort TABLE 2 Differences on Most Significant Factor Factors Based on Characteristics Male of the Firm Gl G2 T-Value Probabihty Female Male/Female Poor listening skills Failure to concentrate on top priorities Inability to determine customer needs Average Annual Sales Per Salesperson Lack of sufficient effort 2. 04 I . 93 2. 04 1. 36 1.
54 I . 46 – 3. 41 ~ 2. 30 – 2. 85 0.
001 0. 023 0. 005 I . 69* wo-tail probability: P < 0. 05. 2.
19 – 2. 69 0. 009 Only significant findings shown. Pooled variance estimate, *Gl 5 $500,000; G2 > $500,000. 228 Identify customer might be reversed by better pay, promotion, or recognition.
The point is, if these deficiencies are recognized, they can be corrected through proper training, motivation, and supervision. Those factors deemed less significant in contributing to salesperson failure could be considered personal characteristics, i. e. , marital problems, substance abuse, emotional immaturity, and job-related aptitude.Not only are these characteristics often more difficult to detect, but they are much less subject to managerial influence. Other than exercising caution during recruiting and selection, the sales manager can do little to directly alleviate these uncontrollable factors.
These findings support those of Churchill et al. 9, who found that “ ‘enduring’ personal characteristics such as aptitude variables and personal/physical traits do have some relationship to performance, but not as much as those characteristics which are ‘influenceable’ through increased training and experience or more effective company policies and procedures (e. . , skill levels, role perceptions, and motivation).
” Deficiencies in influenceable factors were found to be more significant in contributing to salesperson failure than the personal characteristics. This implies that managers can take an active part in preventing salesperson failure through the use of training and motivational techniques to improve those areas considered most significant in salesperson failure. Deficiency in these areas is likely to thwart the establishment of long-term relationships with clients, and lead to the salesperson’s eventual demise.The findings also suggest that sales managers should pay greater attention to the most significant failure factors because deficiencies in these areas may negatively affect relationship selling efforts. Personal selling involving long-term commitments to customers typically involves establishment of a relationship between two parties 131.
By establishing long-term relationships, the salesperson is establishing the opportunity to satisfy future needs. Consequently, satisfaction of such needs means future sales and profits for the company.Evidence suggests relationship quality (satisfaction with and trust in a salesperson) is enhanced through per- needs.
ceived salesperson competence 141. Product/market knowledge is considered to be one of the most important criteria in determining customer satisfaction with salespeople 151. This study shows that inadequate product/ service knowledge is considered one of the most significant factors contributing to salesperson failure.
Moreover, inability to determine customer needs is considered a very significant failure factor.A competent salesperson should, through probing, be able to identify customer needs. Deficiencies in both these areas point to a lack of salesperson competence.
Note that competence is considered important for establishing long-term relationships with customers 161. In addition, relational exchange (selling) involves much effort and planning by both parties 131. Furthermore, relationships are based on communication between parties. Failure to plan adequately for the sales presentation, as well as failure to concentrate on top priorities, point to inadequacies in the ability to plan.
Sales executives rated these deficiencies, coupled with a lack of sufficient effort and poor listening skills, significant in contributing to salesperson failure. Perhaps these are considered very significant because of their importance in establishing relationship selling. Putting forth effort, particularly in terms of planning and communicating (which involves listening as well as speaking), is necessary for establishing long-term relationships with buyers.Additional findings indicate that sales executives believe factors that can be controlled by the salesperson are TABLE 3 Single Most Important Factor for Ensuring a Salesperson’s Success Percent Mentioning 12.
61 IO. 08 7. 56 6. 72 5. 88 5.
04 5. 04 5. 04 Factor 1. Good/positive 2.
3. 4. 5.
6. 7. 8. attitude Proper training Good work habits/hard work Motivation/self-motivation Knowledge (customer, market, competition, Dedication/desire to succeed Identifying customer needs Customer oriented sales approach product) 229 most significant in causing salespeople to fail.However, as pointed out, deficiencies indicated by sales executives as the most significant failure factors are within the control of the employer. Attribution theory suggests that supervisors are more likely to look to subordinates for performance explanations, particularly in the case of poor performance 17, 181.
Apparently, sales executives believe salespeople can control their own destiny. While the salesperson does have control over these factors to some extent, proper execution stems from adequate employer inputs in training and motivation.It appears that sales executives are quick to blame the salesperson for failure rather than company-initiated training or motivation techniques.
Finally, while executives considered personal variables to be the least significant factors contributing to failure, they indicated a personal variable (good/positive attitude) to be the single most significant factor for insuring salesperson success. However, a poor or negative attitude was not mentioned as one of the leading causes of salesperson failure. Hence, inadequacy in what is necessary for “success,” from the sales executives’ viewpoint, may not necessarily lead to failure. actors considered to be most significant in contributing to salesperson failure. It appears costly failure can be avoided through the application of training and motivational techniques designed to address the areas found to be most significant in contributing to salesperson failure.
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